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Response of The Government of Canada to the Report of the 2015 Judicial Compensation and Benefits Commission

This is the Response of the Government of Canada to the Report of the fifth Judicial Compensation and Benefits Commission, dated June 30, 2016. It is issued pursuant to section 26(7) of the Judges Act.

The Government wishes to thank the Chair of the Commission, Mr. Gil Rémillard, and the Commission Members, Ms. Margaret Bloodworth and Mr. Peter H. Griffin, for their commitment to this important public interest process. They reviewed the submissions of the participants and the evidence before them thoroughly and thoughtfully, and addressed the issues raised before them in a timely manner.

Background

Since the first commission process in 1999, there have been four previous Government Responses. Each one has included an overview of the context in which judicial compensation is established. The Government does so again in recognition of the unique nature of the exercise, the important constitutional provisions and principles involved, and the need for clarity in the public interest since the process is, at heart, designed to ensure public confidence in the independence and impartiality of the judiciary.

At the federal level, section 100 of the Constitution Act, 1867 requires that Parliament, rather than the Executive, fix the compensation and benefits of superior court judges. Compensation and benefits for these judges are established in the Judges Act; since 2014, the Judges Act also provides for the compensation and benefits of the prothonotaries of the Federal Court, judicial officers to whom the protections of judicial independence are also extended.

In Reference re Remuneration of Judges of the Provincial Court (P.E.I.), [1997] 3 S.C.R. 3, the Supreme Court of Canada held that before any changes are made to judicial compensation, the adequacy of judicial compensation must be considered by an “independent, objective and effective” commission.

Subsection 26(1) of the Judges Act provides for the establishment of the Judicial Compensation and Benefits Commission every four years. The Commission’s mandate is to inquire into and make recommendations regarding the “adequacy” of judicial compensation and benefits of federally-appointed judges as well as, for the first time in 2015, the prothonotaries of the Federal Court. Subsection 26(1.1) of the Judges Act provides that the adequacy of judicial compensation and benefits, which is taken to include the compensation and benefits of the prothonotaries, is considered in light of the following criteria:

the prevailing economic conditions in Canada, including the cost of living, and the overall economic and current financial position of the federal government;

the role of financial security of the judiciary in ensuring judicial independence;

the need to attract outstanding candidates to the judiciary; and

any other objective criteria that the Commission considers relevant.

The Commission must report to the Minister of Justice within nine months, and the Government must respond publicly to the Commission’s report and recommendations within four months of receipt of the Report (section 26(7)).

The current Commission (the “Rémillard Commission”) convened on October 1, 2015, and delivered its Report to the Minister of Justice on June 30, 2016. The Report contained 13 recommendations: ten related directly and immediately to compensation (Recommendations 1-5 and 7-11), and three that suggested further study or consultation (Recommendations 6, 12, and 13). A full list of the Commission’s recommendations is included at the end of the Response.

Government Response

The Government fully accepts the compensation-related recommendations of the Rémillard Commission. The Government has also taken initial steps to address the recommendations of the Commission that suggest additional study and consultation, and will carry on with these efforts as appropriate and as outlined in further detail below.

Recommendations 1-4: Judicial Salaries

The Commission’s recommendation that judges’ salaries should continue to be adjusted annually on the basis of increases in the Industrial Aggregate Index (IAI) (Recommendation 1) maintains the status quo as provided in section 25 of the Judges Act. The Government had proposed that the Consumer Price Index was a more generally understood indexation measure, and that the historic reasons for which the IAI was initially chosen are no longer relevant. The Commission, however, accepted the expert evidence presented to it on the issue of indexation measures and the purposes for which they are used, which differed from the Government’s submissions. The Commission also noted the Levitt Commission’s statement in 2011 that the “legislative architecture governing judges’ salaries … should not be lightly tampered with” (paragraph 38). In light of the Commission’s careful analysis of the arguments and evidence on the issue, the Government accepts the recommendation.

The Commission had been urged to recommend that a salary differential be paid to the puisne judges of appellate courts. The Commission, however, citing the decline in the number of appellate judges who supported such a proposal over the years, recommended instead that puisne judges from both appellate and trial judges continue to be paid at the same level (Recommendation 3). The Commission also noted that a qualitative evaluation of the relative value of trial and appellate judges is too subjective an analysis on which to base a salary differential recommendation. The Government agrees and, further, reiterates its view that any attempt to quantify the value of trial and appellate judges’ roles in monetary terms risks creating the impression that the role of one or the other is more important to the Canadian justice system. The Government echoes the Commission’s acknowledgement of the distinct and important roles played by both trial and appellate judges, and accepts its recommendation.

Recommendations 2 and 4, which set salary levels effective April 1, 2016, flow directly from the operation of Recommendation 1, but merit specific comment in light of the Commission’s analysis of the evidence. The Commission acknowledged the challenge inherent in any analysis of judicial salaries since “no job is similar to a judge’s” (paragraph 44), but carefully considered the evidence related to public sector and private sector comparators that have been used by previous commissions in their inquiry into the adequacy of judicial salaries. The Commission concluded that the DM-3 comparator should not be used in a mathematical, formulaic fashion, and observed that the “total average compensation” of such a small group, the average salary of which can be so significantly affected by individual outliers, is not a useful reference point (paragraph 52). The Commission’s caution about mathematical approaches applied equally to its treatment of private sector lawyers’ salaries: while noting that certain segments of that population (based on age, region of practice, or minimum income level) may merit careful consideration, the Commission declined to exclude them entirely from the comparison, as the judiciary’s arguments proposed. The Commission also carefully considered the value of the judicial annuity, which represents a unique arrangement that the Commission concluded is superior to alternatives available to private sector lawyers (paragraph 73). The Government is satisfied that the Commission gave due consideration to the evidence at its disposal as it related to the relevant factors.

The Commission declined to accept the judiciary’s proposal that a substantive increase in salary over the course of the quadrennial period was necessary in order to maintain an adequate level of compensation. It concluded that indexation in accordance with the IAI is serving its intended function (paragraph 56). The Government accepts this conclusion, and the recommendations that flow from it, in light of the information currently available.

Recommendation 5: Salaries of the Prothonotaries of the Federal Court

The Commission recommended that the salaries of the prothonotaries of the Federal Court be increased from 76 to 80 percent of the salary of a Federal Court puisne judge. In doing so, the Commission noted that this was the level that had been recommended by the two Special Advisors who had previously reviewed prothonotaries’ compensation, and also considered the evidence presented by the Chief Justice of the Federal Court. Its assessment of the evidence relevant to the statutory criterion that requires the commission to consider the “ability to attract outstanding candidates” militated in favour of an increase. While it addressed the arguments of the prothonotaries in relation to appropriate comparators, the Commission noted that Federal Court judges represent the best relative comparator to the position and work of prothonotaries (paragraph 36). The Government accepts this analysis and the recommendation that flows from it, and further notes that prothonotaries’ salaries will also continue to benefit from the statutory indexation based on IAI.

Recommendation 8: Prothonotaries’ Representational Costs

The Commission recommended that the prothonotaries be reimbursed for 95 percent of their representational costs incurred before this Quadrennial Commission. The Government agrees that the prothonotaries must be supported to an extent that allows them to participate meaningfully in this constitutional process, and acknowledges that the small number of prothonotaries poses challenges that are not present in the costs arrangement of two-thirds reimbursement that applies to judges and makes a similar arrangement inequitable. The Government accepts this recommendation and will introduce amendments to the Judges Act that will provide for this level of reimbursement for the 2015 Quadrennial Commission and future commission processes. The Government trusts that this arrangement will allow for prothonotaries’ meaningful participation while also encouraging participants to exercise prudence in the expenditure of public funds, as well as coordination and cooperation when their interests and arguments align.

The Commission’s recommendation also encouraged the Government to consider a different costs assessment process than that which currently governs the costs regime in the Judges Act. The Government notes that the assessment of the judiciary’s expenses has never in the past been controversial and has, in fact, been concluded on the basis of consent. The Government is confident that the same practices that have worked well for judges will be appropriate for prothonotaries.

The Commission made four recommendations related to the compensation and benefits of various individuals and groups. In its submissions before the Commission, the Government had agreed that these adjustments would be appropriate, but recognized that, in the context of the constitutional framework, it could not unilaterally make the changes in the absence of a commission recommendation. The Government accepts these recommendations and offers the following brief comments:

Incidental Allowance for Prothonotaries (Recommendation 7): The Government agrees that the prothonotaries should receive a non-taxable allowance of $3,000 annually, beginning April 1, 2016, for the payment of expenses related to their duties.

Step-down Amendments (Recommendation 9): The Government has stated that it believes it is fair, appropriate and in the public interest to extend the “step-down” provisions (i.e., those that allow a former chief justice or senior judge who “steps down” to the duties of a puisne judge to receive an annuity based on the chief justice/senior judge salary) to include chief justices or senior judges who step down to become puisne judges of a different court. The Government also agreed that the 2012 amendments, which previously extended the step-down entitlements to senior judges, should be made retroactive to address the situation of the Honourable J.E. (Ted) Richard, former Senior Judge of the Supreme Court of the Northwest Territories, who retired after the Government had announced its intention to make the change, but whose date of retirement preceded the coming into force of the 2012 amendments.

Removal Allowance for Judge Resident in Labrador (Recommendation 10): A judge of the Supreme Court of Newfoundland and Labrador proposed that the removal allowance entitlements in s. 40(1)(c) and (d), which are currently enjoyed by the judges of the territorial superior courts, be extended to judges of the Supreme Court of Newfoundland and Labrador resident in Labrador. Judges resident in Labrador are currently entitled to the same allowance provided for in s. 27(2) that is also provided to territorial court judges in recognition of similarly higher costs of living. It is appropriate that the removal allowance entitlement also be provided on an equal basis, and the Government will introduce necessary amendments to the Judges Act.

Compensation of the Chief Justice of the Court Martial Appeal Court of Canada (Recommendation 11): The Government agrees that it is appropriate that the Chief Justice of the Court Martial Appeal Court receive a salary equal to that of other superior court chief justices, and that the step-down provisions also be extended to that office.

Recommendation 6: Pre-Retirement Arrangements for Prothonotaries

The Commission recommended that the Government and the Chief Justice of the Federal Court consider the possibility of allowing prothonotaries to elect supernumerary status or of creating a senior prothonotary program for those eligible for retirement. The Government notes that, while the Commission made the recommendation for further consultation on the basis of the statutory criterion described in s. 26(1.1)(c) (the need to attract outstanding candidates), the Chief Justice was also concerned with ensuring that a sufficient complement of prothonotaries was available to undertake the court’s work that is within their jurisdiction. In superior courts (other than the Supreme Court of Canada), when a judge elects supernumerary status, a vacancy on the court is automatically created, while the supernumerary judge remains available to undertake reduced duties (generally understood to be half-time), while in receipt of full salary. This is an arrangement that has been reached with all the provinces and territories, which are constitutionally responsible for the administration of justice in the provincial superior courts, but this is not the only way of structuring a pre-retirement arrangement.

The Government is committed to engaging with the Chief Justice of the Federal Court on the issue of possible pre-retirement arrangements, and continuing to communicate with him on workload issues that affect that Court. Effective collaboration has already been established with regard to the judicial complement, and the Government is confident that similar collaboration will be helpful in addressing prothonotaries’ workload issues as well.

Recommendation 12: Portability of Provincial Judicial Pensions

The Commission recommended that the Government consider whether portability of provincial judicial pensions to the federal judicial annuity scheme could be used to remove a possible disincentive for provincial court judges seeking appointment to a superior court. This issue was raised in submissions specifically with reference to encouraging Indigenous provincial court judges to consider applying for federal judicial appointment, it being suggested that the current arrangements act as a deterrent to this important pool of possible candidates for appointment to the superior courts.

The Government takes very seriously the need to increase diversity within the federal judiciary to ensure it better reflects the face of Canada, and specifically seeks to encourage Indigenous applicants. The Government encourages applications for federal judicial appointment not only from among current provincial and territorial court judges, but also from Indigenous lawyers, and lawyers from other historically under-represented groups.

As noted in the Government’s submissions before the Commission, the annuity provided to superior court judges in the Judges Act is unique and its structure does not lend itself to portability with other judicial pension schemes. Such an endeavor would require a review of the entire federal judicial annuity structure, as well of the provincial and territorial legislation that governs judicial pensions. This would involve negotiations and multi-jurisdictional amendments to ensure alignment across Canada and among jurisdictions to provide for portability across all judicial pensions. Even assuming the willingness of relevant actors to engage in such a discussion, this would be a substantial undertaking. The Government also observes that most pension plans include options for deferred or partial pensions; these provisions ensure that accumulated entitlements are not lost for provincial or territorial court judges who are appointed to the superior court.

While the Commission heard that the disincentive that arises is due to the traditional career path for an Indigenous judge, this could be true of other populations as well. The Government is committed to enhancing the diversity of the federal judiciary, and believes that there may be more effective means of addressing this goal. A policy approach that instead seeks to change expectations about anticipated career paths is likely to have a broader impact, be more effective, and achieve the desired result more quickly.

Recommendation 13: Timing Issues

In 2015, the statutory start-date of the Commission coincided with the writ period for the October 19 fixed-date election. This prevented the Government from taking certain steps that were necessary for its full engagement with the commission process until some time after the election. The Government recognizes that since a four-year cycle applies to both the Judicial Compensation and Benefits Commission and fixed-date general elections under the Canada Elections Act, the same challenges could arise again in 2019. The Commission recommended that the Government explore means of ensuring that the statutory time periods are complied with, and the Government, in its submissions before the Commission, committed to ensuring that the judiciary had an appropriate opportunity to provide input on this issue.

The Commission identified a non-exhaustive list of three alternatives (paragraph 209), which the Government has fully considered in light of Government structures and processes, as well as what is permissible under the Westminster model of ministerial accountability that applies in Canada. The Government consulted the judges and the prothonotaries, and has seriously considered the input they provided.

Of note, however, the Commission also identified a factor that, in the Government’s view, is fundamental to the underlying challenge: the “impossibility of predicting the length of an election campaign or the timing of an election call” (paragraph 210). The need for certainty in the applicable time frames has proven decisive to the Government’s ultimate decision on how to respond to this recommendation. The Government will propose amendments to the Judges Act to provide that the next commission will commence its inquiry on June 1, 2020, with subsequent commissions to commence on June 1 every four years thereafter. The Government carefully considered other approaches, including a contingent provision that would operate only when certain conditions are met so as to delay subsequent procedural steps and deadlines. While this would have addressed the possibility of an off-cycle election, the Government concluded that the Commission’s underlying interest in ensuring compliance with the statutory time periods would be best addressed if the start date of the next commission process is known well in advance.

The Government is mindful of the Supreme Court of Canada’s guidance on the question of frequency of judicial compensation reviews, which the Court identified as being necessary every three to five years. The Government notes that an eight-month delay would still see the inquiry take place within a five-year window. More importantly, the change in date will be a one-time event, and subsequent inquiries will continue to take place on a quadrennial cycle. Furthermore, the change will affect the start date only; it will not create a gap in the period for which compensation will be reviewed.

Conclusion

The Government recognizes that the success of the process depends not only on compliance with statutory timeframes but also on the cooperation and collaboration among the participants. The Government is pleased that the Commission saw fit to comment specifically in this regard that it was struck by the degree of cooperation between the various parties during the commission process (paragraph 54). The Government reiterates its commitment to ensuring that this positive dynamic continues in the current and future commission processes.

The Government will take steps to ensure the timely implementation of the Commission’s recommendations by introducing the necessary legislative amendments “within a reasonable period”, as required by section 26(7) of the Judges Act.

Annex: List of the Recommendations of the 2015 Judicial Compensation and Benefits Commission

Recommendation 1

Judges’ salaries should continue to be adjusted annually on the basis of increase in the Industrial Aggregate Index, in accordance with the current Judges Act.

Recommendation 2

Effective April 1, 2016, the salary of federally-appointed puisne judges in all Canadian trial courts should be set, inclusive of statutory indexation, at $314,100.

Recommendation 3

No salary differential should be paid to puisne appellate judges.

Recommendation 4

Salary differentials should continue to be paid to the Chief Justice of Canada, the judges of the Supreme Court of Canada, and the chief justices, associate chief justices, and senior judges of the trial and appellate courts.

Effective April 1, 2016, judges’ salaries should be set, inclusive of statutory indexation, at the following levels:

Supreme Court of Canada:

Chief Justice $403,800

Puisne Judges $373,900

Federal Court of Appeal and Provincial and Territorial Courts of Appeal:

Chief Justice $344,400

Associate Chief Justices $344,400

Puisne Judges $314,100

Federal Court, Tax Court, and Trial Courts:

Chief Justices $344,400

Senior Associate Chief Justices and Associate Chief Justices $344,400

Senior Judges $344,400

Puisne Judges $314,100

Recommendation 5

The salaries of Federal Court prothonotaries be increased, retroactive to April 1, 2016, to 80% of Federal Court judges’ salaries, or $251,300.

Recommendation 6

The Government of Canada and the Chief Justice of the Federal Court of Canada should consider the possibility of allowing prothonotaries to elect supernumerary status under the Judges Act or of creating a senior prothonotary program for those eligible for retirement.

Recommendation 7

Prothonotaries should receive a non-taxable allowance of $3,000 annually, retroactive to April 1, 2016, to be used for the payment of expenses related to their duties.

Recommendation 8

Prothonotaries should be paid 95% of the reasonable full indemnity costs incurred before the Quadrennial Commission. Only if necessary should these costs be assessed under the Federal Courts Rules. The Government should consider possible amendments to the Judges Act to permit these costs to be assessed in the Ontario Superior Court of Justice at Ottawa.

Recommendation 9

The Judges Act should be amended to provide that the retirement annuity of a chief justice or senior judge who has stepped down to a different court as a puisne judge be based on the salary of a chief justice and that the 2012 amendments to section 43(1) and section 43(2) be made retroactive to April 1, 2012.

Recommendation 10

The Judges Act should be amended to extend the entitlement to removal allowances as described in sections 40(1)(c) and (d) to a judge sitting in Labrador, effective April 1, 2016.

Recommendation 11

The necessary legislative amendments should be made to provide, effective April 1, 2016 the Chief Justice of the Court Martial Appeal Court of Canada compensation and allowances equal to those of other superior court chief justices, including an annuity based on the Chief Justice’s salary in cases where he or she has stepped down to a puisne judge position.

Recommendation 12

The Government should consider whether portability of provincial judicial pension benefits to the federal judicial annuity scheme could be achieved as a means of removing a possible disincentive for provincial court judges seeking appointment to superior courts, while maintaining the financial security of federally-appointed judges.

Recommendation 13

The Government should explore a means of ensuring that the time periods set out in section 26(2) of the Judges Act are complied with in a manner consistent with the guidelines set out by the Supreme Court of Canada.